Published: Thu, 02 Apr 2009 12:45:00 +0200

USD Slides as Global Equities Rally

(CEP News) - The U.S. dollar is weaker on Thursday in the aftermath of a global equity rally sparked by better-than-expected auto sales in the United States on Thursday.

Global equities are higher after U.S. automakers reported upbeat production data on Wednesday, with March total vehicle sales up to an annualized 9.9 million compared to February's 9.1 million and an expected 9.2 million level.

Automakers also said the bottom for the industry has been reached.

The Japanese Nikkei closed 4.4% higher while and Hong Kong's Hang Seng closed up 7.41%. European stocks are higher with the German Dax up 4.4% and the FTSE 100 up 3%. Meanwhile, S&P futures are up 2% ahead of the opening bell.

Meanwhile, the G20 meeting in London officially kicked off on Thursday. A draft of the G20 communiqué contains commitments to stimulate economies to create jobs, expand IMF resources, increase regulations on financial institutions to include hedge funds, identify and crack down on tax havens, and work with IMF to inject more money into the global economy by using SDRs. The group is also expected to maintain a commitment to avoid FX competitive devaluations.

Looking ahead, all eyes will be on the U.S. Financial Accounting Standards Board, which is expected to make changes to mark-to-market accounting rules on Thursday that will retroactively allow U.S. firms to report better earnings for Q1 2009. Analysts have warned that such a move could adversely affect interest in the U.S. Treasury's Public-Private Partnership Investment Program, which aims to remove toxic assets from the balance sheets of banks.

Data taken at 6:34 a.m. EDT.

Euro/USD up 1.19 cents to 1.3368

USD/CAD down 0.94 cents to 1.2506

USD/Yen up 1.35 points to 99.87

GBP/USD up 2.25 cents to 1.4692

AUD/USD up 1.25 cents to 0.7118

The U.S. Dollar Index is down 0.55 points to 84.96

By Erik Kevin Franco, efranco@economicnews.ca, edited by Stephen Huebl, shuebl@economicnews.ca